Anna Patty, Ben Schneiders

Justified a $7036 payment from the slush fund to his personal campaign to become national president of the ALP: Tony Sheldon. Photo: Janie Barett

The head of the Transport Workers Union has justified his use of a slush fund and a lack of disclosure about its use, saying it helped rid the Health Services Union of corruption.

The union's national secretary, Tony Sheldon, told the royal commission into union corruption that it was worthy of congratulations that money from the slush fund known as the McLean Foundation helped fund a successful campaign against allies of former HSU leader Michael Williamson.

"We acted in regards to the HSU; that was appropriate and I'd do it again," Mr Sheldon said.

But Mr Sheldon was also forced to defend a $7036 payment from the slush fund to his personal campaign to become national president of the ALP. He claimed he did not benefit from the failed bid to become Labor president as he had become a "target of the conservative national government".

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"I wouldn't see it as a benefit, I'd see it actually as a public service," he said. "I ran on the basis of making sure we had a voice from the trade union movement."

When pressed about whether he disclosed the spending to contributors to the McLean Forum, he did not answer directly.

"It is within the remit of what people would expect us to do," he said.

Mr Sheldon conceded at the inquiry that, for a number of years, the NSW branch of the TWU – by far its largest branch – had grossly overstated the number of members it had when it affiliated with the ALP in NSW.

Fairfax Media reported recently that the TWU was claiming just 17,800 members to the ALP in NSW after previously saying it had more than 38,000 members. This reduced its number of delegates from 43 to 23.

Evidence to the inquiry showed that as far back as 2008, when Mr Sheldon was NSW secretary, the union had only 19,000 financial members while claiming it had more than 39,000 members.

"I'm happy to accept the figure," he said. "We've got it wrong and we rectified it."

The inquiry heard detailed evidence about a number of interventions from the McLean Forum in different unions between 2010 and 2012 including the HSU, the flight attendants union and even the TWU's own Queensland branch. It spent more than $300,000 from the McLean Forum on those campaigns.

The inquiry heard from another long-term director of the McLean Forum, Scott Connolly, also a TWU employee, who played an active role in toppling the Queensland secretary of the union, Hughie Williams.

The McLean Forum, linked to the national and NSW leadership of the TWU, had contributed about $200,000 in the bid to remove Mr Williams in 2010.

Mr Connolly played a role in that decision.

"The Queensland election was very much within the ambit of what those funds should and could be expended for," he said.

In 2011, a year after the defeat of Mr Williams, a new position of assistant secretary was created in the Queensland branch, which went to Mr Connolly.

Mr Connolly's pay of $124,000 is now about $30,000 higher than it was before the challenge to Mr Williams.

He rejected a claim from Counsel Assisting Jeremy Stoljar that there was a link between defeating Mr Williams and gaining a much higher salary.

Mr Connolly said he did not disclose to TWU members in Queensland that the money for the campaign came from the McLean Forum but added: "We were very clear where its money came from, friends and supporters."

He denied the campaign had anything to do with the national office of the union. Mr Connolly said that, while employed in the Queensland branch of the TWU in 2009, Mr Williams had threatened him with a $30,000 a year pay cut. He said that was the "final straw" in his later decision to campaign against and help topple Mr Williams.

Union boss slams $52m waste

The national secretary of the Transport Workers Union has accused Prime Minister Tony Abbott and Employment Minister Eric Abetz of wasting $52 million on "trivial" matters brought before the royal commission into unions.

Tony Sheldon, who is also federal vice-president of the ALP, said outside the commission the government could better spend taxpayer dollars on pursuing corruption.

"I'm calling on Tony Abbott and Eric Abetz to come down to this court and explain why $52 million is being spent on this royal commission rather than setting up a national ICAC, a national inquiry into corruption in the political sphere, right across this country," he said before being called to give evidence.

Mr Sheldon also accused the federal government of allowing big business including Coles and the banks to set its agenda in trying to get "Safe Rates" legislation withdrawn from Parliament. "When you pay the piper, they sing your tune," he said.

The Road Safety Remuneration Bill 2011, known as the "Safe Rates" legislation, was designed to provide fairer rates of pay for self-employed drivers to prevent them from driving unsafe hours. Business groups have opposed the legislation introduced by the former Labor government and strongly supported by the TWU.

The bill established a road safety tribunal to determine mandatory minimum rates of pay for self-employed drivers.

Mr Sheldon said the commission had wasted two hours on Thursday hearing discussing the pay slips of a Queensland union official. "We've seen the royal commission turn around, wash over the fact that those same elected officials took a wage decrease of 6 per cent," he said. ANNA PATTY